It was noted that yesterday's trading in the main currency pair of the currency market took place under the impact of the still current US President, D. Trump's signing of a bill regarding the $ 900 billion financial aid to the American economy, as well as the conclusion of a trade agreement between the European Union and Great Britain, for which the parliamentarians of the parting parties still have to vote. EU officials have negotiated quite decent terms for future trade relations with the UK, in particular, for fishing in British waters. However, it will become known tomorrow whether the House of Commons of the British Parliament will vote for this document. Basically, the British side has no other way to avoid economic collapse.
Meanwhile, Europe is strongly getting ready to meet the third wave of COVID-19, especially after the virus began to mutate. According to the latest data, a new strain of coronavirus infection has already reached Germany. This could lead to an even greater tightening of quarantine measures, which will not be received well by the leading European economy. In addition, one of the most important topics recently is the mass vaccination of Europeans. However, in order to develop collective immunity against coronavirus, it is necessary to vaccinate about 70% of the inhabitants of European countries, which will take some time and the result will be only by spring. Today's economic calendar is almost empty, so the course of trading in the EUR/USD pair will be determined by market mood and the technical factor.
Daily
The pair failed to rise above the level of 1.2250 and closed Monday trading at 1.2214, despite yesterday's initial growth. On the one hand, the closing of the day above the important level of 1.2200 can be attributed to the euro bulls. However, on the other hand, the strong resistance of the sellers at the level of 1.2272 remains an unbroken barrier that prevents the main currency pair from continuing to rise to higher prices.
During the time of this writing, the euro/dollar is showing growth and is trading near the level of 1.2243, but the day has not yet ended and it is not known how it will end. If the quotes continue to rise and today's trading ends above 1.2272, this will be a signal that the pair is ready to continue its growth. As mentioned before, the nearest target will be the strong price zone 1.2300-1.2320. If a bearish candlestick analysis pattern appears on the daily chart at the end of trading, this may signal a reversal or at least a corrective pullback of EUR/ USD.
H4
Let's turn to the four-hour chart in order to outline today's trading recommendations. It can be noticed that the euro/dollar pair is still trading in a rising channel within the limits of 1.1601-1.1799 (support line) and 1.1919 (resistance line). It is clearly seen that the 50 simple moving average supports the quote and does not let it lower for now. Therefore, I recommend buying deals after a decline to 50 MA, which is 1.2211. Another option for opening long positions at more attractive prices will be a decline to the lower limit of the channel, where the black 89 exponential moving average is also located. This is the price zone near the level of 1.2165. If a bearish pattern or candlestick analysis patterns appear on this or hourly time frames after rising to 1.2256-1.2272, a signal will appear to open sales. In conclusion, I would like to recommend not to set big goals in both cases, as the pre-holiday market is prone to frequent changes of mood.